For example way back in the year 2013, when the Gold was in the cusp of new Bull Run market players were predicting it to hit a mind boggling new highs. Especially when it hit $1900 many analysts’ and investment Bankers issued statements that Gold will raise to $5000! Speculators justified it by citing the historic Dow: gold ratio or Gold : Silver ratio. Some speculators also brought in the inflation factor and informed that on the basis of adjusted inflation the yellow metal should hit $5000. During the same time we informed that Gold’s continued rise is merely the speculative function of a bubble, not a reflection of fundamentals. Now when the yellow metal is languishing at around $1200 after hitting all time high of $1950 no one is talking about $5000 not even $2000. I am citing this because it is a recent history.

Bull market always brings in some kind of comedy to the investing community. Just look at the IMF statement which informed that India's economy will grow much faster than forecast and outpace rival China. Even in the wildest of our dream we cannot imagine this. I may not sound patriotic (lucky I am not in Mumbai otherwise we would have to face dharnas from some political outfit) but it is the fact. Today’s Hindu editorial confirms with my opinion and for more of analysis one may look at Hindu online. It is funny that many people will not know how to differentiate between fundamental and technical and later would lose money in the market.

Market is commanding lofty valuation. In particular, pharmaceutical and IT sector stocks are surely untouchable on the basis of valuations. Some broking house have given Marksans pharma as an investment tip. If you stick on to fundamentals this is an untouchable stock and I cannot recommend it even to my enemy. The stock may go up owing to liquidity factor that does not mean that I am wrong. We will have to understand the peculiarity of Mr. Market and should stay away from such kind of stocks. If one would had invested in the peak price of Infosys in 2000 (which is Rs 500 adjusted to split and bonus) one would have to wait for the next 5 years to see the same price. Even today after 15 years it has gained about 400% from its peak price. Mind it this is to a stock like Infosys.

I do not want to paint a negative picture but one has to be careful in the bull market. Friendly Brokers always give several recommendations as a part of their income generation. It is for the investors to investigate on the fundamentals. It is a pity that most of the investors want free lunch. It is high time they realize that there is no free lunch in economics and a free tip always comes with riders.

Coming back to the markets yesterday the Nifty corrected sharply in the ending game. As usual our morning post predicted a correction with a special equation E = MC2. Hope all of you enjoyed our yesterday’s post which was on the dot on the market. We continue to be cautiously bullish and we should realize that investing in the bull market requires lots of skills.